The police may work to rule unless the government comes up with an 11th-hour pay offer this week. A failure by both sides to reach a settlement would seriously damage relations between the police and the Home Office and prompt accusations that public protection is being put at risk because of budget constraints.

Normally Britain's 160,000 police receive an automatic pay rise linked to inflation. The deal is agreed at the Police Negotiating Board between the 'staff side', representing the police, and the 'official side', for the government.

But to the dismay of the Police Federation, which represents rank-and-file officers, the official side looks as if it will reject the deal for the first time since the formula was introduced 28 years ago.

The Home Office wants a deal linked to a commitment by forces to modernise, a demand that has infuriated the Police Federation. 'I can see 160,000 police officers becoming very angry over this situation,' said Jan Berry, the federation's chair.

'The perception is that they are being made to pay for the performance of the Home Office in other areas,' Berry said, referring to a commitment to increase the Immigration and Nationality Directorate's budget.

The pay formula was established because police are barred from going on strike. But Berry warned they could still make their grievances felt. There have been suggestions of a mass march on Whitehall, which would bring unwanted publicity for the Home Office at a time when the Home Secretary, John Reid, is keen to be seen turning the beleaguered department around. 'The police could opt to work to rule which would be counterproductive for justice,' Berry said. 'The one public service you have always been able to rely upon was the police.'

All police, from constables up to chief constables, had expected their annual pay rise to kick in this September. Instead, if there is no agreement, both sides will have to go to conciliation with any agreed pay increase unlikely to be introduced until much later in the year.

A spokesman for the Home Office stressed it was still hoping to find a solution. 'At this time every year the staff side of the Police Negotiating Board table a claim for the up-rating of police pay. This year is no different. The official side of the Police Negotiating Board is now considering the claim... and will respond in the near future.'